From 2006 to 2016, after ten years, Uni-President and Jinmailang have finally 'broken up'. Uni-President China (0220.HK) disclosed on the afternoon of May 9 that it would transfer its 47.83% stake in Jinmailang Beverages to a company named Consistent Returns Pte. Ltd. for 1.291 billion yuan. After this sale, Uni-President will no longer hold any equity in Jinmailang Beverages. Since 2012, Uni-President has been seeking to exit its investment in Jinmailang Beverages, and now it has become a reality. A relevant person in charge of Uni-President China told a reporter from China Business News: "Since 2006, Uni-President China Investment has established Jinmailang Beverages as a joint venture with Jinmailang Investment Co., Ltd., with a business strategy of 70% penetration into the vast rural market in China and 30% attacking first-tier cities. Both parties have invested their advantageous resources and cooperated closely, and have basically completed the phased strategic goals. To realize investment returns and replenish working capital, Uni-President China Holdings has decided to sell all its indirectly held equity in Jinmailang Beverages." Jinmailang Beverages also issued a statement today explaining the reason for the 'breakup': "To welcome and create the brilliance of the second decade, the company needs to seek capital momentum, further release brand value, and embrace a new round of greater development opportunities. In the process of moving towards the capital market, it was constrained by 'horizontal competition' with shareholder Uni-President. After friendly consultations, Uni-President formally withdrew." The marriage between Jinmailang and Uni-President began in 2006. Currently, Jinmailang Beverages' main products include deep spring water, tea beverages, vitamin drinks, and fruit juices. According to the company's official website, Jinmailang Beverages has 7 branches and 14 subsidiaries, has established 14 production bases, and has more than 52 internationally advanced production lines. Currently, its products have entered 28 provinces nationwide, cumulatively building 580,000 terminal stores. This Sino-foreign joint venture was once seen by the media as a powerful alliance to conquer China's beverage industry. At its inception, Jinmailang Beverages disclosed to the media that it hoped to achieve a revenue target of approximately 10 billion yuan by 2015, and defined this as an important step in Jinmailang's 'ten-year plan'. However, according to information disclosed by Uni-President China, as of December 31, 2015, Jinmailang Beverages' audited consolidated total assets and net assets were 3.142 billion yuan and 1.988 billion yuan respectively, with 47.83% accounting for approximately 1.503 billion yuan and 951 million yuan respectively. After 10 years of operation, Jinmailang Beverages' after-tax net profit for 2015 was 181 million yuan, a year-on-year decrease of 11.6%, with revenue of 2.582 billion yuan. Now, Uni-President China's beverage business revenue has exceeded 10 billion yuan, far larger than Jinmailang Beverages, and its products are also similar to Jinmailang Beverages. The decreasing complementarity between the two may be another deep reason for Uni-President's choice to part ways. However, Jinmailang Beverages today reviewed its cooperation with Uni-President with satisfaction: "In 2006, Jinmailang and Uni-President jointly established Jinmailang Beverages Co., Ltd. Both parties invested their advantageous resources and cooperated closely, and both parties are satisfied with the cooperation." In fact, as early as 2012, Uni-President China had already disclosed that it was in discussions with multiple potential buyers to propose selling the combined 47.83% interest in Jinmailang Beverages held by two wholly-owned subsidiaries. Through this sale, Uni-President expects to realize a pre-tax book gain of approximately 266 million yuan and will use the proceeds for general working capital purposes. After more than three years of searching, Uni-President China finally found a buyer in Consistent Returns Pte. Ltd. According to Jinmailang Beverages' disclosure, this company is Affinity Equity Partners (referred to as 'Affinity'), described as 'Asia's largest independent private equity fund', 'Asia's best private equity', and a leading private equity with experience in food and beverage. Affinity is an international private equity fund, currently managing funds totaling over $8 billion, and has completed transactions with a total value of $13 billion across 10 countries. Affinity has long focused on the food and beverage industry and is the leading food and beverage private equity investment fund in Asia. Jinmailang Beverages further stated in the announcement: "The introduction of Affinity Capital marks the company's successful first step towards the capital market." Uni-President China stated: "We believe that Affinity Capital can bring global resources and capital market operation experience to Jinmailang Beverages after the transaction is completed, helping Jinmailang Beverages move towards the next stage of strategic goals." Source: China Business News, Lu Kunqian This platform will soon organize several experience-sharing salons titled "How Distributors Should Operate B2B". We will invite some domestic distributors who have actually operated for a period of time to share their experiences and how they operate in the local market. 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